In the week ending June 21, the Chinese longs market has shown a slight recovery, following the steady downtrend of previous weeks. While some domestic mills have kept their offers unchanged, others have decreased their prices slightly. As of June 21, average longs prices in the main Chinese cities are as follows:
Product name |
Specification |
Category |
Average price (RMB/mt) |
Price ($/mt) |
Weekly change ($/mt) |
6.5 mm |
Q235 |
4,003 |
587 |
+1 |
|
20 mm |
HRB 335 |
3,937 |
577 |
+1 |
|
20 mm |
HRB 400 |
4,050 |
594 |
+1 |
In China's three main steel markets, i.e., Shanghai, Beijing and Guangzhou, the prices of Q235 grade 6.5 mm size high speed wire rod now respectively stand at RMB 4,000/mt ($587/mt), RMB 3,940/mt ($578/mt) and RMB 4,070/mt ($597/mt), with HRB 335 grade 20 mm rebar prices respectively at RMB 3,790/mt ($556/mt), RMB 4,040/mt ($592/mt) and RMB 3,980/mt ($584/mt). Meanwhile, HRB 400 grade 20 mm rebar is priced at RMB 3,820/mt ($560/mt), RMB 4,130/mt ($606/mt) and RMB 4,200/mt ($616/mt) in the above respective markets. All prices are ex-mill and include 17 percent VAT.
On June 21, Jiangsu Province-based Chinese domestic steel producer Shagang Steel Group announced its new longs prices for late June. Accordingly, the steelmaker's price of 14-25 mm HRB 335 rebar is at RMB 3,950/mt ($579/mt), unchanged as compared with the price list for mid-June, while its price of 6.5 mm Q235 high speed wire rod is now at RMB 4,250/mt ($623/mt), down RMB 50/mt ($7/mt). Meanwhile, Shangang's price for 8 mm HRB 400 rebar in coil is quoted at RMB 4,400/mt ($645/mt), also down by RMB 50/mt ($7/mt). It is expected that other domestic mills will mainly keep their prices unchanged for late June.
During the week in question, sales activities have been sluggish in the Chinese market due to the lack of demand from southern regions where heavy rainstorms have negatively affected local rebar demand. However, rebar consumption is expected to improve due to rebuilding projects aimed at repairing the damage caused by the rainstorms. In order to melt down their inventories, some domestic traders have been willing to give discounts for actual sales. However, on the whole, market prices have at least been trending stable or have shown some increases here and there. Despite some slight price increases observed in the rebar futures market, these increases were insufficient to have any influence on the ready stock market. Meanwhile, with the summer season approaching, longs demand will probably be weakened further due to the lower number of new housing starts.
Despite the lack of upward momentum, China's longs market is expected to trend sideways in the coming week, given the high levels of raw material prices.